The Telegraph
Since 1st March, 1999
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Bengal clamours for power sops

New Delhi, June 12: West Bengal today demanded that the subsidy element for state electricity boards should be worked into the Electricity Act and a fund created for rural electrification.

The state government has also asked Union power minister Anant Geethe to re-examine the programme design of the Accelerated Power Development Reform Programme (APDRP). It has also sought reduction in procedures for release of funds under the APDRP.

Speaking at the conference of state ministers of power on capacity addition and APDRP, Mrinal Banerjee, West Bengal minister for power, said, “Not much thought seems to have gone into rural electrification and agriculture power supply. It is not enough to imply, as the new Act does, that rural electrification and agriculture supply will be taken care of by stand-alone systems.”

“I ask you if the state electricity boards stand restructured, who will do the rural electrification work' From where will the money for minimum subsidy come' Have the private players in the telecom sector fulfilled their universal service obligations' Do you think that we may end up with the same problem in the power sector as well'” asked Banerjee.

Banerjee told the power minister that a Power Sector Reform fund should be immediately created with a substantial upfront contribution.

“Transition finance will be a critical input. State governments now have stringent restrictions on contingent liabilities and are unlikely to provide guarantee cover. Loan finance for meeting pension/ retirement liabilities may not be a good idea since it will have an immediate impact on tariffs,” said Banerjee.

The state government has written to the power ministry suggesting that the proposed power sector reform fund should be used as a single window for projects and channel all available funds from external agencies, bank or from development finance institutions, instead of making the SEBs go to various funding agencies.

Banerjee detailed the various power projects being undertaken by the state government and urged Geethe to expedite the decision for the formation of a joint venture between West Bengal State Electricity Board and National Hydro Electric Power Corporations for the Purulia pumped storage project.

Earlier, while inaugurating the conference, Geethe said, in order to achieve the goal of power to all by 2012, the Central Electricity Authority has estimated that additional generation capacity of 1 lakh megawatt needs to be created by 2012.

“The APDRP has been fine tuned to incentivise the process of reform in electricity distribution. The success of this programme will strengthen the SEBs and utilities which would help in improving the financial health of the state governments,” said Geethe.

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